The TAX And Spen Big Goverment Mantr Continues

For the Americans who care and can see the "Handwriting On The Wall" do not give your senators, congressmen or their whippersnapper staffers any peace. Remind them that it takes votes to get reelected and they won't get yours if they continue to enable and blindly support this President's destructive policies. The Democratically controlled Congress is aiding and abetting the President as he continues to blindly extol detrimental changes to how we do business..The President's misguided, amateurish policies are ruining America, Her reputation, Her economy, Her People, Her future..........

Taxes Or Growth?
By INVESTOR'S BUSINESS DAILY | Posted Tuesday, June 30, 2009 4:20 PM PT

Taxes: The White House refuses to rule out raising taxes on the middle class. Meanwhile, a top finance official in the previous Clinton White House suggests a tax hike is all but inevitable. Are we being set up????......................


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It sure looks that way. And if it happens, you can mark it down: The economy will slow to a crawl and may even relapse into a deep recession. This is a complete reversal of what was promised by this Administration.

"In an economy like this," President Obama said at last summer's Democratic National Convention, "the last thing we should do is raise taxes on the middle class." That, he said, included 95% of all families. He promised flat out that he wouldn't raise taxes on families with income of less than $250,000.

Stand by for an Obama "Flip Flop". How times have changed. On Monday, White House spokesman Robert Gibbs, was asked point-blank several times if the president's "no tax" vow was still good, his answer "we are going to let the process work its way through."

"Process"? Middle class, watch out.

Actually, the last thing we should do is raise taxes on any class — lower, middle or upper. Tax hikes in a recession are plain crazy. They will inevitably crimp economic activity, slow retail sales, kill jobs and leave the government starved of revenues.

A major study in 2007 looking at recent U.S. economic history found that when the government raises taxes by 1%, U.S. GDP falls by roughly 2% to 3%. As we've noted before, the only surprising thing about this study is its author: Christina Romer, President Obama's top economic adviser. Is he still listening to her? I doubt it.

The sweeping ambition of this White House is to continue to expand government. This policy will require massive tax hikes to pay for it. If it ever was, this is no longer in doubt. The shame of it is that many Americans are still desperately holding on to a "Wait and see" attitude". Stand by for a flash folks, it will not happen. Be advised, the "Slick talking Snake Oil salesman in the White house can not, I repeat, can not talk us out of this depression. In spite of skillful rhetoric, more and more Americans are becoming unemployed. Currently, unemployment is eating us up at 10%+. Not long ago the President "prophesied that un-employment would not go above 8%. Unfortunately, the "Wait and see" crowd is hoping against hope that the President can pull it off. They refuse to see the noses in front of their faces. These are the same self deluded folks that fail to see the danger of the President instituting a hegemony over the country by appointing Czars. Many Americans refuse to see the danger of using Czars to circumvent Congress. The President has inadvertently ushered in a period of "Gangster Government". One in which political cronies get preferential treatment over those from the opposing party.

Just look at the tab run up so far — and some of the costs that we might soon have to pay. All told, we'll spend $13 trillion more than we'll take in through 2019. How will we pay for it all?

The Congressional Budget Office recently estimated that U.S. taxes as a share of GDP would have to rise 49% by 2035 to pay for just the spending already budgeted. And these taxes will hit all Americans, not just the "rich." This is a recipe for an economic disaster in America.

"We'll have to raise taxes soon," recently wrote President Clinton's former deputy Treasury secretary, Roger Altman, in a Wall Street Journal opinion piece this week that sounded suspiciously like a trial balloon for Democrats in Congress and the White House.

There's a far better answer to our economic ills.

At the same time the U.S. is pondering economic suicide through massive tax hikes, other countries are learning not from Obamanomics but from Reaganomics: They're pondering tax cuts.

Germany's Angela Merkel wants to cut taxes, despite her country's big deficit. "How can we ensure Germany emerges stronger once the crisis is over and the cards have been reshuffled in the world? The answer is we need growth," she said this week.

Even Hungary's socialist government says the same thing. It's pushing supply-side tax cuts in 2010 to stimulate its economy.

Our guess is Germany and Hungary will show more life in the next year than the U.S., unless the U.S. wakes up.

Usually at this point in the business cycle, the U.S. is the locomotive that pulls the rest of the world out of its slump. This time, the world is looking to China to get the job done. In the U.S., the rest of the world sees only a growth-killing mix of higher taxes, soaring spending, surging debt, rising inflation and growing regulation.

We could reverse this. Instead of tax hikes, we need broad-based tax cuts for families and business. But we must act right away. After all, why let this crisis go to waste?

Tony Passaro

Bel Air, MD.